Following reports that China has taken steps to limit the use of tech giant Apple’s (NASDAQ:AAPL) products at various crucial departments and state-owned entities, the country has raised security issues with iPhones but refrained from a ban on purchases, reported Bloomberg.
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Furthermore, China is planning to widen the ban on the use of iPhones at state-owned establishments. This puts Apple in a tough spot as China remains its largest market globally as well as the hub of its manufacturing operations.
At the same time, while all companies operating in China are required to follow its regulations, Mao Ning, a spokesperson for the country’s Foreign Ministry noted that, “China has not issued laws and regulations to ban the purchase of Apple or foreign brands’ phones.” Also, the majority of Apple’s sales in China are to consumers, with government buying making up less than 1% of total iPhone revenue in the country, so the new limits on iPhones at state-owned entities are less impactful on Apple’s bottom line. According to Citi analyst Atif Malik, the concerns about a ban are overblown and he expects Apple’s volume to remain largely unaffected.
Despite these hiccups, Apple’s market dominance and pricing power remain supreme. The development comes fresh on the heels of Apple’s special launch event yesterday where the company introduced a slew of products, including four new models of iPhone 15. According to CNBC, the company has increased the prices of its new iPhones in markets including China, Japan, and India. Interestingly, while keeping prices unchanged in the U.S., the company has lowered prices in the U.K.
Overall, the Street has a consensus price target of $207.03 on Apple, alongside a Moderate Buy consensus rating.
